One of the funniest books of all time is Jim Glassman and Kevin Haslett's Dow Jones 36,000. Practically every page of this irrationally exuberant magnum opus generates more laughs than anything Jay Leno or David Letterman ever thought of. Of course, the humor mostly comes from the fact that the authors were earnest in writing such drivel. Things look quite different in 2005 from what they did in 1999.
So why is it that I open my TV today and see someone trying to sell stocks as superior to bonds for investing one's nest egg? For starters, it won't surprise anyone that this guest was from Oppenheimer Funds, so he's basically promoting his company's products. However, the way it's being marketed--stocks instead of bonds for one's nest egg--smacks of irrational exuberance. Stocks that pay out higher dividends can mimic bonds to an extent, but the trouble remains the same. From the time Dow Jones 36,000
came out to now, stock markets have gone precisely nowhere. Throw in the depreciation of the dollar and inflation, and US stocks have been a losing proposition. What guarantee is there that stocks will do better than they did for the remainder of the decade, during which boomers will start to retire? In the age of mass terror, soaring energy prices, corporate malfeasance, and housing bubbles, I'll stay on the safe side and stick with bonds. So far, the evidence suggests that most people are doing the same.
Posted by Emmanuel |
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